Sunday, June 8, 2014

FKLI - Still A Listless Market But Watch Out What May Comes Next- 6/7/2014

The last buy trade was the third failed signal. Price went below the previous Friday low and that should effectively closed off the long trade. A new sell signal came out on the same day when price gone below the top band with the Stochastic turning negative again. The signal was not met until last Thursday. And this could just turned out to be another dud trade as price went up again on last Friday.

Please take note the Bollinger Band has begun to tighten and the ADX has been flat at 9's (wow!). And the DMI has begun to wriggle.  These are classic confirmation of a listless market. This is why last week I was saying that you would be forgiven if you have skipped trading for a while.

But if a short trade was initialed, then place stop at the middle band. But I would advocate wait and look for closing above the top band or bottom band before deciding if a new trade is to be entered. As the MACD and Stochastic are still negative and falling, the situation is now more biased toward the shorts side. The DMI is also negative.

The weekly still offer no sell signal as the MACD and DMI remain positive. Price is still manged to remain above the top band. Two important items to watchout for here would be the Stochastic as it has been in the overbought zone and it has just crossed down. The weekly Japanese Candlestick is an Engulfing Bear which mean the black candlestick real body engulfs the previous week's white body. Since the candlestick is found at FKLI's recent mild bull rally, this could mean the bull is losing control.

I would pay attention to top band support, if that gives away, it would probably mean the bear is back.

Both the daily and weekly chart are still pointing to a listless market. But as mentioned here for the past few weeks, I am getting more and more bearish biased (overbought and bearish divergences etc) and the current listless market condition is adding more weight to my "worry" as a listless market usually will bring violent moves soon.

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